Many people believe estate planning is only for rich people, or people who are near death. However, this is far from the truth. Estate Planning can help you create a plan to effectively manage your assets while alive, and plan for the orderly transfer of those assets following your death. The assets may be owned jointly with others, or solely by you. Your estate is the summation of all assets of any value that you own. Some of these assets could include real property, business ventures, stocks, investments, and personal property. An estate plan is the plan by which those assets are passed on to your loved ones or charities/organizations after your death. An estate plan minimizes complications with the distribution of your assets after death, thereby saving money and frustration. An estate planning attorney can help you create a strong estate plan, using tools such as:
● Revocable living trusts
● Irrevocable trusts
● Living wills
● Joint ownership
● Life estates
Understanding Wills and Trusts
The purpose of having a will is to prepare for the orderly transfer of your assets after death. A will is a legal document that tells the court how you want your property distributed and who will be the person empowered to wrap up your affairs. Trusts are used in conjunction with wills for many purposes including tax reductions, disposing of assets to minors, and having some control over the use of assets that you plan to distribute after your death. Trusts can also be used separately from wills to assist you and others while you are alive.
Wills and trusts provide a breadth of flexibility in the disposal of your assets, prevents fighting among heirs, and saves your family from costly probate and public distribution of your assets.
Other Important Estate Planning Documents
Just as important as having a will or trust is a Power of Attorney. A Power of Attorney allows another individual to make decisions over your personal affairs or financial decisions in the event you become incapacitated and unable to care for yourself. Without this document, an individual would have to apply to the court to appoint someone to make those decisions for you if you were incapacitated. This process can be frustrating and lengthy. A Power of Attorney can save you thousands in legal, court, and business fees.
Another very important document is the “living will.” A living will can exist by itself or be part of a healthcare power of attorney where a specific individual makes health care decisions on your behalf. A living will specifies your end-of-life actions you would like taken on your behalf. Without a living will, your end-of-life preferences may not be carried out.